When price changes, quantity demanded will change. That is a movement
along the same demand curve. When factors other than price changes,
demand curve will shift. These are the determinants of the demand curve.

1. Income: A rise in a personís income will lead to an
increase in demand (shift demand curve to the right), a fall will lead
to a decrease in demand for normal goods. Goods whose demand varies
inversely with income are called inferior goods (e.g. Hamburger Helper).

2. Consumer Preferences: Favorable change leads to an
increase in demand, unfavorable change lead to a decrease.

3. Number of Buyers: the more buyers lead to an increase
in demand; fewer buyers lead to decrease.

4. Price of related goods:

a. Substitute goods (those that can be used to replace each other):
price of substitute and demand for the other good are directly related.

Example: If the price of coffee rises, the demand for tea should
increase.

b. Complement goods (those that can be used together): price of
complement and demand for the other good are inversely related.

Example: if the price of ice cream rises, the demand for ice-cream
toppings will decrease.

5. Expectation of future:

a. Future price: consumersí current demand will increase if they
expect higher future prices; their demand will decrease if they expect
lower future prices.

b. Future income: consumersí current demand will increase if they
expect higher future income; their demand will decrease if they expect
lower future income.

Review:

A change in quantity demanded is caused by a change in its own price
of the good.